Especially attractive as income investments are the Royal Bank of Canada (RY), Bank of Montreal (BMO) and Bank of Nova Scotia (BNS). The Royal Bank of Canada pays a dividend yield of 4.2% on a payout ratio of 53%. Its forward valuation is below the stock's historical metrics. Bank of Montreal pays a dividend yield of 4.8% on a payout ratio of 50%. Based on a forward P/Es, it is trading at a discount to its peer group and historical ratios. The Bank of Nova Scotia pays a dividend yielding 3.9% on a payout ratio of 49%. Over the past five years, these three banks have grown their dividends at average annual rates of 5.2%, 1.3%, and 5.0%, respectively. GOLD STOCKS Investors who are wary of the prolonged surge in Canadian housing prices and mounting consumer debt and who thus prefer to avoid Canadian financial stocks, can consider investing in the gold sector. The sector offers value, given the extended slump in prices over the past year or so. It now looks poised for growth as gold prices are likely to stage a rebound in the near future. For instance, Barrick Gold (ABX) is a good income and value play. It pays a dividend yield of 2.3% on a low payout ratio of 20%. Its dividend increased at an average rate of 17% per year over the past year. The stock is attractive based on valuation, as its trailing and forward P/Es are well below those of competitors and the company's own historical metrics. An even more attractive dividend growth play may be IAMGOLD (IAG). This debt free company pays a dividend yielding 2.2% on a payout ratio of 24%. The stock has boosted its dividend 30% per year over the past five years. If it continues to hike its dividend at similar rates in the future, it will double its payout within three years.